Public-private partnership (P3) engagements are the new norm! Governmental entities, lacking the funds needed to meet public needs, are reaching out to private sector contractors and bringing them along as partners for large projects.
A majority of the states (31 in all) have passed legislation enabling P3s and most of those states are aggressively courting potential private sector partners. The federal government chose not to establish a centralized system but is instead allowing agencies to enact their own P3 processes. Because there is no standardized engagement process, P3 laws throughout the country are varied and diverse to say the least.
A few examples of state P3 statutes follow.
The State of California has legislation that allows solicited and unsolicited proposals for P3s. Their statutes:
- Authorize agencies to solicit proposals from and enter into agreements with private sector contractors for the design, construction, reconstruction or lease of fee-producing infrastructure, including commuter and light rail systems;
- Preclude use of state funding and limits lease terms to 35 years; and
- Gives priority to water supply infrastructure projects that include cost-sharing arrangements that maximize public benefits.
The State of Colorado has P3 statues that allow solicited and unsolicited P3 proposals and includes authorization for:
- Creating a statewide tolling enterprise to finance, build, operate and maintain toll highways;
- Giving P3 authority to the Colorado Department of Transportation (DOT) for specific projects, including turnpikes and High Occupancy Toll (HOT) lanes; and
- Operating as a government-owned business within Colorado DOT.
The State of Connecticut has statutes that allow for solicited and unsolicited P3 proposals and also includes authorization for:
- Local governments to enter into a P3 to design, build, finance, develop and maintain a public project; and
- State agencies to execute partnership agreements for P3 projects.
The State of Delaware enacted legislation that encourages solicited and unsolicited proposals for P3 projects for transportation systems. Provisions within the statute include:
- Verbiage stipulating that transportation systems are not limited to horizontal construction of highways, roads and bridges, but will also include airports, transportation facilities, management systems and other transportation-related investments;
- Requirements that legislative approval must occur on a per-project basis; and
- The establishment of a Clean Water Advisory Council that has the authority to consider P3s for water infrastructure.
Legislators in Texas passed statutes that provide structure and authority regarding P3 projects. The law allows for solicited and unsolicited proposals and designates:
- A process for P3 projects to become qualified as P3 initiatives.
West Virginia legislators passed a law that enables the use of P3s in the development of transportation infrastructure and has provisions that:
- Define transportation P3 projects as any public inland waterway port facility, road, bridge, tunnel, overpass or existing airport; and
- Makes the Division of Highway the coordinating body to solicit and receive proposals.